What does mark-to-market primarily measure?

Mark-to-market is primarily a valuation method that assesses the current market value of an asset or financial position. This technique allows for the timely and transparent valuation of securities and other financial instruments based on current market conditions, reflecting the amount that an asset would fetch in the marketplace at a given point in time.

By focusing on the current replacement cost, mark-to-market captures the value that would be required to replace an asset or position based on the latest market data. This approach ensures that financial statements accurately reflect the current worth of assets, instead of outdated valuations based on historical costs or estimates, which may not represent the true economic value in fluctuating markets.

The other options do not align with the primary purpose of mark-to-market valuation. For instance, measuring expected future cash flows pertains more to discounted cash flow analysis, while the total value of an asset at maturity relates to fixed income securities' valuation at their due date. Historical price does not inform current market valuations and thus is not relevant in the context of mark-to-market, which values assets based on up-to-date market conditions rather than prior trading or purchase prices.